RCF at fresh 52-week high on account of divestment news

RCF share price: Shares of state-owned fertilizer company Rashtriya Chemicals and Fertilizers Limited (RCF) on Monday, November 28, hit a fresh 52-week high as the counter gained more than 4 per cent. RCF share price settled 3.39 per cent higher at Rs 123.55 apiece on NSE on account of news of divestment. On BSE, RCF closed at Rs 123.35.

RCF has yielded a whopping 78 per cent return in the past one year while 61 per cent so far in 2022.

According to a Zee Business exclusive report, the government is likely to consider giving management control in state-run to fertilizer companies as it vies to divest its stake.

The report said that an Offer For Sale (OFS) of government owned Rashtriya Chemicals and Fertilizers (RCF) Limited and National Fertilizers Limited (NFL) is likely to come where the government intends to sell 10 per cent stake in the former while 20 per cent in the latter.  

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Both these companies have received great response in the roadshow and the government is considering the feedback on the transfer of management control.

According to the report, the companies who have participated in the roadshow are of the view that if the government decides in favour of shifting the management control, the valuations will improve significantly.  

Government think tank NITI Aayog has recommended 8 companies for divestment out of which two are already on the block. The preparations of divestment of RCF and NFL are complete, and the government could announce the OFS anytime, Sharma said. 

As for the rest, a cabinet note is being prepared on how much stake will be divested in each company in consultation with the Department of Public Enterprises and Department of Investment and Public Asset Management (DIPAM). 

The move is on lines similar to IDBI Bank where the government will give management control.

Q2 result 

State-owned RCF on November 12 had posted a 123 per cent rise in net profit at Rs 261.9 crore for the second quarter of the current fiscal (Q2 FY23) that ended on September 30, against Rs 117.9 crore in the same period of the previous fiscal.

Total income increased to Rs 5,575.9 crore during the July-September quarter from Rs 2,612.4 crore in the year-ago period, the company said in a regulatory filing.

Expenses rose to Rs 5,286.3 crore as against Rs 2488.3 crore year-on-year.

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